Right of First Refusal to Purchase Premises Clause
(Commercial Lease) (Pro-Tenant)

Summary

This right of first refusal to purchase premises clause may be used in a commercial lease agreement to grant the tenant a right of first refusal to purchase the leased premises. This clause favors the tenant and contains practical guidance, optional landlord clauses, and drafting notes. Landlords generally disfavor rights of first refusal because such a right requires the landlord to secure an offer to purchase from a third-party without any assurance that the tenant will not simply exercise its right of first refusal and purchase the premises. A pro-tenant clause is generally only found in a lease for premises that would be difficult to sell due to problematic features or market conditions. A right of refusal is generally only granted by a landlord to a tenant of a freestanding, rather than multi-tenant, building. Tenants of a freestanding building who enter into long-term leases with the landlord may be most successful in bargaining for a right of first refusal. The terms used in the clause should conform to those defined in the lease (e.g., Premises means the space or property leased by the tenant, and Term means the term of the lease as defined therein.) For other right of first refusal clauses, see Right of First Refusal to Purchase Premises Clause (Commercial Lease) and Right of First Refusal. For more information on rights of first refusal clauses in leases, see Tenant Purchase Options in Commercial Leases. For further information on commercial leasing, see Industrial Leasing Resource Kit, Office Leasing Resource Kit, Restaurant Leasing Resource Kit, and Retail Leasing Resource Kit. See also Junior Associate Real Estate Resource Kit (Commercial Leasing).